Advertisement
UK markets open in 5 hours 42 minutes

  • NIKKEI 225

    40,707.89
    +127.13 (+0.31%)
     

  • HANG SENG

    17,978.57
    0.00 (0.00%)
     

  • CRUDE OIL

    83.88
    0.00 (0.00%)
     

  • GOLD FUTURES

    2,369.40
    0.00 (0.00%)
     

  • DOW

    39,308.00
    -23.90 (-0.06%)
     

  • Bitcoin GBP

    47,012.00
    -1,559.91 (-3.21%)
     

  • CMC Crypto 200

    1,264.10
    -70.82 (-5.31%)
     

  • NASDAQ Composite

    18,188.30
    +159.54 (+0.88%)
     

  • UK FTSE All Share

    4,463.09
    +33.43 (+0.75%)
     
Money:

What to do with an inheritance

For many, an inheritance represents a once in a lifetime opportunity

Breakeven On The Horizon For Outlook Therapeutics, Inc. (NASDAQ:OTLK)

Simply Wall St
·3-min read

With the business potentially at an important milestone, we thought we'd take a closer look at Outlook Therapeutics, Inc.'s (NASDAQ:OTLK) future prospects. Outlook Therapeutics, Inc., a late clinical-stage biopharmaceutical company, focuses on developing and commercializing monoclonal antibodies for various ophthalmic indications. The US$246m market-cap company announced a latest loss of US$66m on 30 September 2022 for its most recent financial year result. Many investors are wondering about the rate at which Outlook Therapeutics will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Outlook Therapeutics

Consensus from 5 of the American Biotechs analysts is that Outlook Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$74m in 2025. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 62% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Outlook Therapeutics' growth isn’t the focus of this broad overview, but, keep in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

ADVERTISEMENT

Before we wrap up, there’s one issue worth mentioning. Outlook Therapeutics currently has a debt-to-equity ratio of 125%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Outlook Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Outlook Therapeutics' company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

  1. Valuation: What is Outlook Therapeutics worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Outlook Therapeutics is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Outlook Therapeutics’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here